Home Companies&Markets Zenith Bank grows gross earnings by 6% in Q1-2021

Zenith Bank grows gross earnings by 6% in Q1-2021

ZENITHBANK was the most traded stock by value at NGN1.02 billion

SAT 01 MAY, 2021-theGBJournal- ZENITHBANK released its Q1-21 financial report on Friday, which showed a 6% increase in Gross Earnings from N158.1 billion in March 2019 to N166.8 billion for the period.

The top line growth is an outcome of the 43% expansion in non-interest income from N32.7 billion in the prior-year period to N46.6 billion in March 2020. Non-interest income growth was driven by a 98% surge in trading income from N7.8 billion in March 2019 to N15.5bn in the quarter.

Profit before tax improved 3% from N57.3 billion in the prior-year period to N58.8 billion in March 2020. Increased profits benefited from the twin effects of continuing top-line growth and focused cost-of-funds optimisation.

Cost of funds declined significantly from 3.0% in March 2019 to 2.6% in the quarter, translating to a 10% decrease in interest expense dropping from N36.3 billion in March 2019 to N32.8 billion in the quarter.

Despite this drop, the current low yield environment, necessitated the repricing of interest-bearing assets which in turn resulted in a 13% compression in net interest margin, decreasing from 8.9% in March 2019 to 7.7% in the current period.

‘’We have continued to gain customer acceptance with customer deposits increasing by 5% from N4.26 trillion in December 2019 to N4.46 trillion in the current period,’’ the Bank said, adding ‘’our customer deposit mix rebalancing remains on-track as the Group added N150 billion in savings account balances in Q1 2020, supported by our intense retail drive.’’

Total assets increased by 12% growing from N6.35 trillion in December 2019 to close at N7.13 trillion in the current period. In the quarter, gross loans grew by 11% from N2.46 trillion in December 2019 to N2.74 trillion within the period.

The Bank said, ‘’while seeking opportunities in select sectors, risk management and prudence took precedence as cost of risk moved marginally from 0.4% to 0.6%. Our conservatism over the years has put in a very strong position from a balance sheet, capital adequacy and liquidity standpoint allowing for our prudential ratios to exceed the relevant regulatory thresholds as at end-March 2020.’’

On its outlook, the bank said, ‘’the COVID-19 pandemic has created significant challenges for the global economy including several markets in which we operate. While we do not know the duration and extent of the pandemic on the economy, we are evolving to take advantage of the opportunities a post-COVID world will present.’’

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